Lime and limestone are materials that have shaped human civilization for thousands of years. Limestone is a common sedimentary rock formed mostly from calcium carbonate. It develops over millions of years from either marine organisms (shells, coral, plankton, etc.) or chemical precipitation in oceans and lakes.

Limestone is converted into lime by burning (calcining) it in a kiln at 1000ºC. Lime can then be mixed with water (hydrated) to form hydrated lime. Finished lime then absorbs CO2 and slowly transforms back to calcium carbonate (i.e., limestone). The lime cycle is one of the oldest known chemical cycles used by humans

Limestone been used as building material for centuries, from pyramids to great cathedrals of Europe, including Notre Dame, Westminster Abbey and St Peter’s Basilica. More commonly it is used as an ingredient in cement and concrete, and in building roads. It is also a widely used industrial mineral, either unprocessed or transformed into a lime derivative.

Limestone is estimated to account for 15% of surface rock on Earth, but high-purity limestone valued in industrial, construction, environmental and agricultural applications is much rarer as are deposits of scale that can be commercially exploited.

Applications across industries

SigmaRoc PLC (SRC LN), a recent addition to the portfolio, is a lime and minerals group targeting quarried materials assets in the UK and Northern Europe. The business is asset backed with over 2.7 billion tonnes of mineral reserves and resources, the equivalent of over 100 years of resources.

SigmaRoc has exposure to the construction, industrial and environmental end markets with applications such as:

Construction

• Quarried limestone and granite materials are used in both infrastructure and residential applications such as the construction of roads, railways, bridges, ports, airports and buildings. The main products include aggregates, asphalt, ready mix concrete, pre-cast concrete and dimension stone.

Industrial

• Lime is used as a flux in steel and copper production to remove impurities and control melt chemistry.
• Quicklime is involved in pulp and paper production.
• Limestone powder is used as a filler in paints and adhesives.

Environmental

• Quicklime, slaked lime and limestone powder remove acidic compounds from flue gas.
• Lime treats drinking water by raising pH, and wastewater by reducing toxicity.
• In soil treatment, lime raises soil pH.

Quarries and their locations

SigmaRoc has an advantage in that it owns quarries. In countries where it does not own quarries (the UK and Poland), it has on-site kilns and long-term supply agreements with the quarry owner. Owning the quarry means fixed costs are manageable and ensures both the quantity and quality of supply.

Having quarries located close to customers has key logistical advantages. Firstly, the weight of the product means it is not feasible to ship long distances. Lime products are dangerous to transport due to lime’s high chemical reactivity. It is classified as corrosive under transport regulations and producers need regulatory compliance to ship. Quicklime degrades over time, meaning shipping long distances is unfeasible, reducing the threat of imports.

Integration, growth and megatrends

The three main lime producers in Europe are SigmaRoc and two privately owned Belgian companies. After those, the market is fragmented and the SigmaRoc has a “buy-and-build” growth model. The strategy is to acquire assets (quarries, lime and limestone businesses, related infrastructure) in fragmented local markets, then integrate them to extract synergies, scale and efficiency.

SigmaRoc has cyclical recovery potential and is poised to benefit from megatrends that support long-term growth. If macro conditions improve – supported by infrastructure spending, lower rates and renewed housing policy – SigmaRoc’s scale and flexibility could drive outperformance. Its diversified presence across geographies also helps smooth region-specific cycles.

Future growth is also supported by the ongoing electrification of economy. This creates a huge increase in demand for batteries, and lime is required in the mining and refining of lithium. European steel – and especially green steel – should also benefit from electrification, so long as the industry is protected from high carbon inputs, potentially reduced import quotas and higher tariffs. Beyond electrification, flue gas scrubbing creates an environmental market for lime, a process that addresses shipping emissions.

Limestone and lime are attractive markets due to high barriers to entry, the irreplaceable nature of product and the lack of material import flow into Europe. With an M&A track record as the foundation for future growth, we believe that makes SigmaRoc a compelling investment in the materials sector.

The post Sedimentary, my dear Watson: Lime and limestone applications across industries appeared first on Groupe financier Connor, Clark & Lunn ltée.

Lime and limestone are materials that have shaped human civilization for thousands of years. Limestone is a common sedimentary rock formed mostly from calcium carbonate. It develops over millions of years from either marine organisms (shells, coral, plankton, etc.) or chemical precipitation in oceans and lakes.

Limestone is converted into lime by burning (calcining) it in a kiln at 1000ºC. Lime can then be mixed with water (hydrated) to form hydrated lime. Finished lime then absorbs CO2 and slowly transforms back to calcium carbonate (i.e., limestone). The lime cycle is one of the oldest known chemical cycles used by humans

Limestone been used as building material for centuries, from pyramids to great cathedrals of Europe, including Notre Dame, Westminster Abbey and St Peter’s Basilica. More commonly it is used as an ingredient in cement and concrete, and in building roads. It is also a widely used industrial mineral, either unprocessed or transformed into a lime derivative.

Limestone is estimated to account for 15% of surface rock on Earth, but high-purity limestone valued in industrial, construction, environmental and agricultural applications is much rarer as are deposits of scale that can be commercially exploited.

Applications across industries

SigmaRoc PLC (SRC LN), a recent addition to the portfolio, is a lime and minerals group targeting quarried materials assets in the UK and Northern Europe. The business is asset backed with over 2.7 billion tonnes of mineral reserves and resources, the equivalent of over 100 years of resources.

SigmaRoc has exposure to the construction, industrial and environmental end markets with applications such as:

Construction

• Quarried limestone and granite materials are used in both infrastructure and residential applications such as the construction of roads, railways, bridges, ports, airports and buildings. The main products include aggregates, asphalt, ready mix concrete, pre-cast concrete and dimension stone.

Industrial

• Lime is used as a flux in steel and copper production to remove impurities and control melt chemistry.
• Quicklime is involved in pulp and paper production.
• Limestone powder is used as a filler in paints and adhesives.

Environmental

• Quicklime, slaked lime and limestone powder remove acidic compounds from flue gas.
• Lime treats drinking water by raising pH, and wastewater by reducing toxicity.
• In soil treatment, lime raises soil pH.

Quarries and their locations

SigmaRoc has an advantage in that it owns quarries. In countries where it does not own quarries (the UK and Poland), it has on-site kilns and long-term supply agreements with the quarry owner. Owning the quarry means fixed costs are manageable and ensures both the quantity and quality of supply.

Having quarries located close to customers has key logistical advantages. Firstly, the weight of the product means it is not feasible to ship long distances. Lime products are dangerous to transport due to lime’s high chemical reactivity. It is classified as corrosive under transport regulations and producers need regulatory compliance to ship. Quicklime degrades over time, meaning shipping long distances is unfeasible, reducing the threat of imports.

Integration, growth and megatrends

The three main lime producers in Europe are SigmaRoc and two privately owned Belgian companies. After those, the market is fragmented and the SigmaRoc has a “buy-and-build” growth model. The strategy is to acquire assets (quarries, lime and limestone businesses, related infrastructure) in fragmented local markets, then integrate them to extract synergies, scale and efficiency.

SigmaRoc has cyclical recovery potential and is poised to benefit from megatrends that support long-term growth. If macro conditions improve – supported by infrastructure spending, lower rates and renewed housing policy – SigmaRoc’s scale and flexibility could drive outperformance. Its diversified presence across geographies also helps smooth region-specific cycles.

Future growth is also supported by the ongoing electrification of economy. This creates a huge increase in demand for batteries, and lime is required in the mining and refining of lithium. European steel – and especially green steel – should also benefit from electrification, so long as the industry is protected from high carbon inputs, potentially reduced import quotas and higher tariffs. Beyond electrification, flue gas scrubbing creates an environmental market for lime, a process that addresses shipping emissions.

Limestone and lime are attractive markets due to high barriers to entry, the irreplaceable nature of product and the lack of material import flow into Europe. With an M&A track record as the foundation for future growth, we believe that makes SigmaRoc a compelling investment in the materials sector.

The post Sedimentary, my dear Watson: Lime and limestone applications across industries appeared first on Groupe financier Connor, Clark & Lunn ltée.

What’s New

We are pleased to announce the recent expansion of our LP Fund platform with the addition of an international equity strategy managed by our Quantitative Equity team and available to eligible US investors.

About Connor, Clark & Lunn Investment Management Ltd.

Founded in 1982, Connor, Clark & Lunn is a privately owned investment management organization dedicated to delivering outstanding client service and a wide range of attractive investment solutions to our diverse client base. We understand the investment challenges faced by individuals, pension plans, corporations, foundations, mutual funds, First Nations and other organizations, and focus our efforts on meeting their investment needs by offering a comprehensive array of investment strategies, spanning traditional and alternative asset classes in a variety of quantitative and fundamental styles.

All data is as of March 31, 2026 and stated in US dollars. Source: Connor, Clark & Lunn Financial Group Ltd., FTSE Global Debt Capital Markets Inc., MSCI Inc., Thomson Reuters Datastream and S&P. Portfolio performance is preliminary, based on a representative account for the applicable strategy and may be subject to change. All performance data is gross of fees unless otherwise stated. Gross performance figures are stated after trading expenses and operating expenses but before management fees and performance fees, if applicable. Operating expenses include items such as custodial fees for segregated accounts and for pooled vehicles would also include charges for valuation, audit, tax and legal expenses. Management fees and additional operating expenses would reduce the actual returns experienced by investors. 1. These strategies are subject to performance fees, which will further reduce actual returns experienced by investors.

This publication is for information purposes only and is not an offer to buy or sell, nor a solicitation of an offer to buy or sell any security or other financial instrument advised by CC&L.

For further information on performance, please contact us at cclim@cclgroup.com.

Source: MSCI Inc. The MSCI information may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used as a basis for or a component of any financial instruments or products or indices. MSCI makes no express or implied warranties or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. This report is not approved, reviewed or produced by MSCI.

The post First Quarter 2026 <br><h2>Non-Canadian Equity Strategies</h2> appeared first on Groupe financier Connor, Clark & Lunn ltée.

Not long ago, alternative investments played only a marginal role in the portfolios of Canadian university endowments. Exposure to assets such as commercial real estate, infrastructure, private equity, private credit and hedge funds was limited, not by philosophy, but by practicality. Smaller endowments often lacked the scale required to meet minimum commitments, as well as the internal resources needed to manage the added operational complexity.

That landscape has changed. According to the latest investment survey from the Canadian Association of University Business Officers (CAUBO), Canadian endowments have expanded their use of alternative strategies at a rapid pace over recent years.

What’s driving the shift?

Smaller and mid-sized endowments now have access to thoughtfully designed platforms from investment managers and consultants. These solutions lower minimum commitments, streamline operations and enable endowments to build diversified portfolios that increasingly resemble those of much larger institutional peers.

Marked shift in alternatives allocations

Larger Canadian endowments, those with assets exceeding $150 million, have long incorporated alternative investments into their portfolios. By contrast, the average allocation for smaller endowments is much lower, as shown in Figure 1.

Figure 1: CAUBO Asset Allocation Averages (end of 2024)

Source: Investment survey of the Canadian Association of University Business Officers.

Importantly, headline averages understate the extent of this shift. For endowments with assets below $150 million, aggregate figures include a meaningful number of funds with no allocation to alternatives at all. When the analysis is limited to endowments that do invest in alternatives, a different picture emerges where average allocations rise materially, from 10% to 18% for funds under $150 million, and from 6% to 16% for those under $50 million (Figure 2).

Figure 2: CAUBO Asset Allocation Averages (end of 2024) – only if invested

Source: Investment survey of the Canadian Association of University Business Officers.

Why invest in alternatives?

The growing allocation to alternative investments reflects a set of structural advantages that align well with long‑term endowment objectives. Alternatives can enhance return potential,  improve diversification, provide inflation protection and contribute to overall portfolio resilience. Private assets are not priced daily, resulting in lower reported volatility. For long‑horizon investors, this characteristic can be valuable, supporting smoother portfolio outcomes and more stable spending policies. In addition, alternative strategies often exhibit low or even negative correlation with traditional equity and bond markets, helping to improve portfolio efficiency and risk‑adjusted returns.

The post The rise of alternatives in Canadian university endowments appeared first on Groupe financier Connor, Clark & Lunn ltée.

Il n’y a pas si longtemps, les placements alternatifs ne jouaient qu’un rôle marginal dans les portefeuilles de fonds de dotation des universités canadiennes. L’exposition à des actifs comme l’immobilier commercial, les infrastructures, le capitalinvestissement, le crédit privé et les fonds de couverture était limitée pour des raisons pratiques, et non pas en raison de la philosophie de placement. Souvent, les fonds de dotation plus modestes ne disposaient pas de l’envergure nécessaire pour respecter les engagements minimaux ni des ressources internes nécessaires pour gérer la complexité opérationnelle accrue.

Ce contexte a changé. Selon le dernier sondage sur les placements de l’Association canadienne du personnel administratif universitaire (ACPAU), les fonds de dotation canadiens ont eu de plus en plus recours à des stratégies alternatives au cours des dernières années.

Qu’est-ce qui explique ce changement?

Les fonds de dotation de petite et moyenne taille ont maintenant accès à des plateformes conçues avec soin par des gestionnaires et consultants en placement. Ces solutions réduisent les engagements minimaux, rationalisent les opérations et permettent aux fonds de dotation de constituer des portefeuilles diversifiés qui ressemblent de plus en plus à ceux de leurs homologues institutionnels beaucoup plus importants.

Changement marqué dans la répartition des solutions de placements alternatifs

Les grands fonds de dotation canadiens, soit ceux dont l’actif dépasse 150 millions de dollars, ont depuis longtemps intégré des placements non traditionnels dans leurs portefeuilles. En revanche, la répartition moyenne des fonds de dotation de plus petite taille est nettement inférieure, comme le démontre la figure 1.

Figure 1 : Répartition moyenne de l’actif de l’ACPAU (fin 2024)

Source : Sondage sur les placements de l’Association canadienne du personnel administratif universitaire.

Fait important, les moyennes globales sous-estiment l’ampleur de cette évolution. Pour les fonds de dotation disposant d’actifs inférieurs à 150 millions de dollars, les données agrégées incluent un nombre significatif de fonds ne présentant aucune allocation aux placements alternatifs. Lorsque l’analyse se limite aux fonds de dotation qui investissent effectivement dans ces actifs, un portrait différent se dessine : les allocations moyennes augmentent sensiblement, passant de 10 % à 18 % pour les fonds de moins de 150 millions de dollars, et de 6 % à 16 % pour ceux de moins de 50 millions de dollars (figure 2).

Figure 2 : Répartition moyenne de l’actif de l’ACPAU (fin 2024) – seulement si l’actif est investi

Source : Sondage sur les placements de l’Association canadienne du personnel administratif universitaire.

Pourquoi investir dans les placements alternatifs?

La pondération croissante des placements alternatifs reflète un ensemble d’avantages structurels qui s’harmonisent bien avec les objectifs de dotation à long terme. Les placements alternatifs peuvent accroître le potentiel de rendement, améliorer la diversification, protéger contre l’inflation et améliorer la résilience globale des portefeuilles.

Les actifs privés ne sont pas évalués quotidiennement, ce qui réduit la volatilité déclarée et peut être utile pour les investisseurs à long terme en favorisant des résultats de portefeuille plus harmonieux et des politiques de dépenses plus stables. De plus, les stratégies de placements alternatifs présentent souvent une corrélation faible, voire négative, avec les marchés traditionnels des actions et des obligations, ce qui aide à améliorer l’efficacité du portefeuille et les rendements ajustés au risque.

The post La montée des placements alternatifs dans les fonds de dotation des universités canadiennes appeared first on Groupe financier Connor, Clark & Lunn ltée.

The housing, business investment and stockbuilding cycles average 18, 9 and 3.5 years respectively. The most recent lows are judged to have occurred in 2009, 2020 and 2023, suggesting that the next bottoms will be reached around 2027, 2029 and 2027. All three cycles, therefore, are expected to be in downswings over the next 1-3 years.

Cycle history suggests two possibilities. If the three downswings coincide, a major recession is likely. Historical precedents include the severe global downturns of 1974-75 and 2008-09.

If the cycle lows are spaced out over several years, the template would be the early 1990s – a longer period of rolling economic weakness involving a less damaging recession.

An earlier episode of triple cycle weakness in the late 1950s was also associated with a less pronounced recession but the fall in output on that occasion was limited by strong trend economic growth, reflecting post-war reconstruction.

The impact of shocks on the global economy depends on the cyclical backdrop. Activity bounced back strongly after the 2020 covid shock partly because the stockbuilding and business investment cycles were in time windows to enter recovery phases, while the housing cycle remained in an upswing.

Similarly, economic damage from the 2022 energy shock due to Russia’s invasion of Ukraine was limited by support from the business investment and housing cycles, with only the stockbuilding cycle then in a weak phase.

The timing of the Gulf War III shock echoes the 1973 Arab oil embargo, which hit as the three cycles were peaking and resulted in synchronised and self-reinforcing downswings into 1975 lows.

There are important mitigating differences from the 1973 shock. The oil price rise has been much smaller, while the oil intensity of GDP has fallen significantly. The 1973 shock occurred against a backdrop of double-digit G7 money growth, ensuring an inflationary outcome – current expansion is still low. Surging inflation forced major monetary policy tightening, the combined result being a severe real money squeeze – see chart 1.

Chart 1

Real money trends appeared modestly supportive before the current shock: global / G7 growth had firmed into early 2026, suggesting that economic expansion was on course to hold up through Q3.

The mechanical impact of higher energy and other costs on consumer price inflation will ensure a sharp slowdown in real money momentum into mid-year – chart 2. The extent of the decline will be key for assessing the likely degree of economic weakness. As noted, modest money growth argues against significant “second-round” inflation effects but central banks are hinting at precautionary tightening, which would magnify monetary weakness.

Chart 2

A further risk is of “endogenous” monetary tightening if the Gulf War III shock interacts with recent problems in private lending, leading to a generalised reduction in credit availability. Such a shift could be signalled in ECB and Fed loan officer surveys due in late April and early May respectively.

Country real money numbers through February suggest that US economic prospects were improving absolutely and relative to other majors before the shock – chart 3.

Chart 3

Japanese monetary weakness continues to argue that BoJ policy tightening – via large-scale QT as well as rate hikes – has been misguided. As expected, core CPI inflation – ex. food and energy – has fallen and is below 2% even stripping out the impact of government subsidies.

Recoveries in Eurozone and UK real money momentum have stalled at unimpressive levels, suggesting dull economic prospects before the shock. Within the Eurozone, readings are similar across the large economies, with France no longer a negative outlier.

Chinese real money momentum has slowed but may hold up better than elsewhere going forward, reflecting stable interest rates and government intervention to limit price rises. A strong balance of payments position, partly stemming from a still significantly undervalued currency, is generating monetary inflows.

Cyclical equity market sectors had started to underperform before the shock. The cyclical / defensive relative is correlated with the stockbuilding cycle, which is not expected to bottom before late 2026 at the earliest – chart 4.

Chart 4

The post A “monetarist” perspective on current equity markets appeared first on Groupe financier Connor, Clark & Lunn ltée.

The housing, business investment and stockbuilding cycles average 18, 9 and 3.5 years respectively. The most recent lows are judged to have occurred in 2009, 2020 and 2023, suggesting that the next bottoms will be reached around 2027, 2029 and 2027. All three cycles, therefore, are expected to be in downswings over the next 1-3 years.

Cycle history suggests two possibilities. If the three downswings coincide, a major recession is likely. Historical precedents include the severe global downturns of 1974-75 and 2008-09.

If the cycle lows are spaced out over several years, the template would be the early 1990s – a longer period of rolling economic weakness involving a less damaging recession.

An earlier episode of triple cycle weakness in the late 1950s was also associated with a less pronounced recession but the fall in output on that occasion was limited by strong trend economic growth, reflecting post-war reconstruction.

The impact of shocks on the global economy depends on the cyclical backdrop. Activity bounced back strongly after the 2020 covid shock partly because the stockbuilding and business investment cycles were in time windows to enter recovery phases, while the housing cycle remained in an upswing.

Similarly, economic damage from the 2022 energy shock due to Russia’s invasion of Ukraine was limited by support from the business investment and housing cycles, with only the stockbuilding cycle then in a weak phase.

The timing of the Gulf War III shock echoes the 1973 Arab oil embargo, which hit as the three cycles were peaking and resulted in synchronised and self-reinforcing downswings into 1975 lows.

There are important mitigating differences from the 1973 shock. The oil price rise has been much smaller, while the oil intensity of GDP has fallen significantly. The 1973 shock occurred against a backdrop of double-digit G7 money growth, ensuring an inflationary outcome – current expansion is still low. Surging inflation forced major monetary policy tightening, the combined result being a severe real money squeeze – see chart 1.

Chart 1

Real money trends appeared modestly supportive before the current shock: global / G7 growth had firmed into early 2026, suggesting that economic expansion was on course to hold up through Q3.

The mechanical impact of higher energy and other costs on consumer price inflation will ensure a sharp slowdown in real money momentum into mid-year – chart 2. The extent of the decline will be key for assessing the likely degree of economic weakness. As noted, modest money growth argues against significant “second-round” inflation effects but central banks are hinting at precautionary tightening, which would magnify monetary weakness.

Chart 2

A further risk is of “endogenous” monetary tightening if the Gulf War III shock interacts with recent problems in private lending, leading to a generalised reduction in credit availability. Such a shift could be signalled in ECB and Fed loan officer surveys due in late April and early May respectively.

Country real money numbers through February suggest that US economic prospects were improving absolutely and relative to other majors before the shock – chart 3.

Chart 3

Japanese monetary weakness continues to argue that BoJ policy tightening – via large-scale QT as well as rate hikes – has been misguided. As expected, core CPI inflation – ex. food and energy – has fallen and is below 2% even stripping out the impact of government subsidies.

Recoveries in Eurozone and UK real money momentum have stalled at unimpressive levels, suggesting dull economic prospects before the shock. Within the Eurozone, readings are similar across the large economies, with France no longer a negative outlier.

Chinese real money momentum has slowed but may hold up better than elsewhere going forward, reflecting stable interest rates and government intervention to limit price rises. A strong balance of payments position, partly stemming from a still significantly undervalued currency, is generating monetary inflows.

Cyclical equity market sectors had started to underperform before the shock. The cyclical / defensive relative is correlated with the stockbuilding cycle, which is not expected to bottom before late 2026 at the earliest – chart 4.

Chart 4

The post A “monetarist” perspective on current equity markets appeared first on Groupe financier Connor, Clark & Lunn ltée.

Alors qu’à la fin de 2025, les commentaires sur les marchés portaient sur la durabilité des valorisations élevées des actions américaines à mégacapitalisation du secteur des technologies de l’information, les actions canadiennes ont affiché un rendement nettement supérieur, comme il est illustré ci-dessous. Ce phénomène ne s’est pas limité aux actions à grande capitalisation, l’indice des titres à petite capitalisation TSX ayant bondi de 50,2 %, surpassant l’indice Russell 2000 à 7,5 % en $ CA.

Solide année pour les actions canadiennes

Source : S&P Global Intelligence.

Rotation des meneurs du marché — souvent pour de longues périodes

L’histoire montre que les marchés boursiers canadiens et américains connaissent de longs cycles de surperformance et de sous-performance relatives. Les actions américaines ont inscrit des rendements supérieurs pendant plus de 10 ans après la crise financière mondiale jusqu’à tout récemment, tandis que les actions canadiennes ont inscrit des rendements supérieurs au cours des 10 années et plus qui ont suivi l’éclatement de la bulle technologique à la fin des années 1990 :

Rotation des meneurs du marché sur de longues périodes

Source : Bloomberg.

Arguments en faveur d’une surperformance prolongée des actions canadiennes

Bien que les cycles de rendement relatifs soient difficiles à prévoir, plusieurs facteurs favorables devraient soutenir la surperformance du Canada à l’avenir.

1. L’économie canadienne à un point d’inflexion

La baisse de la productivité au Canada durant la décennie perdue de 2015 à 2025 est bien documentée, tout comme les défis auxquels l’économie intérieure est confrontée en raison de l’évolution du nationalisme et de la politique commerciale des États-Unis. Toutefois, nous pourrions considérer 2025 comme un point d’inflexion positif pour l’économie canadienne, car plusieurs facteurs sont maintenant en place pour améliorer les perspectives de croissance :

• Exposition structurelle aux secteurs de croissance à long terme : Le Canada a une exposition démesurée aux secteurs de l’énergie et des matériaux, qui sont essentiels à la hausse de la demande mondiale d’électricité. L’électrification, les infrastructures d’IA et les investissements dans les réseaux stimulent la demande soutenue de cuivre, de gaz naturel et d’uranium, tandis que des années de sous-investissement limitent l’offre. De plus, la démondialisation et les politiques commerciales protectionnistes augmentent le risque d’une hausse persistante de l’inflation, ce qui fait grimper les prix des métaux précieux.
• La politique budgétaire est passée d’un facteur défavorable à un facteur favorable : Les récentes mesures commerciales des États-Unis ont accéléré le changement d’approche budgétaire du Canada. Le nouveau gouvernement fédéral dirigé par le premier ministre Carney poursuit un programme plus axé sur la croissance et les entreprises, axé sur l’investissement, les dépenses ciblées et les allégements fiscaux. Nous estimons que ces mesures pourraient ajouter environ 40 pb à la croissance du PIB chaque année à moyen terme, ce qui représente un point d’inflexion économique évident.
• La politique monétaire est maintenant résolument favorable : La Banque du Canada a réduit les taux de près de 300 pb au cours des 18 derniers mois, ramenant résolument sa politique monétaire en territoire expansionniste. L’assouplissement des conditions financières devrait favoriser la croissance, les placements et les bénéfices sur le marché boursier canadien.

2. Dynamique intéressante des marchés boursiers

L’amélioration de la croissance économique ne se traduit pas toujours par une surperformance des marchés boursiers. L’indice composé S&P/TSX présente toutefois plusieurs caractéristiques uniques qui sont de bon augure pour son rendement futur :

Valorisations intéressantes et composition sectorielle intéressante

Le ratio C/B plus faible du TSX par rapport à l’indice S&P 500 est souvent attribué à sa plus faible exposition aux titres à grande croissance et à mégacapitalisation liés aux technologies de l’information. Bien que la pondération des titres technologiques soit beaucoup plus importante au sein de l’indice S&P 500, les investisseurs pourraient être surpris d’apprendre que presque tous les secteurs sont évalués de façon plus attrayante au sein de l’indice TSX, malgré des estimations très semblables pour la croissance des bénéfices en 2026, comme il est illustré ci-dessous :

Forte croissance prévue des bénéfices en 2026

Source : Bloomberg au 31 décembre 2025.

« Notre équipe est aussi enthousiaste que depuis au moins dix ans à l’égard des perspectives des actions canadiennes. Nous trouvons des occasions à grande, à moyenne et à petite capitalisation qui devraient continuer de profiter de l’émergence de plusieurs facteurs positifs à long terme. Le moment est bien choisi pour investir au Canada. » Michael McPhillips, gestionnaire de portefeuille, cochef des placements et directeur de la recherche, Stratégies fondamentales d’actions

Les valorisations au Canada sont plus intéressantes au niveau des indices et des secteurs

Source : Bloomberg, *pour l’immobilier à l’aide du ratio C/B prévisionnel, pour la technologie à l’aide du ratio VE/ventes prévisionnel, pour les services aux collectivités à l’aide du ratio VE/BAIIA prévisionnel et pour l’énergie à l’aide du ratio C/FT prévisionnel. Données au 31 décembre 2025.

Exposition démesurée à la production d’électricité et aux producteurs d’or

Le leadership des États-Unis dans le secteur des technologies s’ajoute à la vigueur des produits de base et des banques au Canada

Source : S&P Global Market Intelligence.

Le tableau ci-dessus illustre les avantages qu’offrent les actions canadiennes sur le plan de la diversification aux investisseurs qui investissent dans des actions américaines, compte tenu des pondérations sectorielles très différentes et complémentaires. Au cours de la dernière décennie, l’exposition démesurée aux technologies de l’information a contribué à la surperformance du marché boursier américain.

Toutefois, nous nous attendons à ce que la forte représentation des sociétés liées à la production d’électricité et d’or sur les marchés boursiers canadiens contribue fortement au rendement :

Sociétés canadiennes en % du secteur MSCI Monde tous pays

Source : S&P Global Intelligence au 31 décembre 2025.

Étant donné que les investisseurs mondiaux cherchent à accéder à ces types d’actifs et à diversifier leur exposition aux actions américaines, le rendement des investisseurs étrangers pourrait être favorable.

3. La stabilité de la monnaie est importante pour les investisseurs établis en dollars canadiens

Le risque de change est souvent sous-évalué jusqu’à ce qu’il devienne important. Au cours des 12 derniers mois seulement, le dollar canadien a progressé d’environ 10 % par rapport au dollar américain. Pour les investisseurs ayant un passif en dollars canadiens – caisses de retraite, fonds de dotation, fonds d’assurance ou besoins de dépenses au Canada –, cela représente une source importante de volatilité du portefeuille.

Au comptant $ CA/$ US

Source : Bloomberg.

Ce mouvement de change est principalement attribuable à deux facteurs. Premièrement, l’opinion moins favorable des investisseurs mondiaux à l’égard du dollar américain comme valeur refuge a entraîné une diversification dans le segment de l’or et d’autres actifs. La forte représentation des producteurs d’or et d’autres produits de base sur le marché boursier canadien a accentué cette vigueur du dollar canadien. Comme l’on s’attend à ce que chacune de ces tendances persiste, les monnaies pourraient demeurer un obstacle pour les investisseurs en dollars canadiens qui détiennent des actions américaines.

4. Un marché attrayant pour la gestion active

Comme c’est le cas pour presque tous les marchés liquides, les investisseurs en actions canadiennes peuvent choisir entre une exposition active et une exposition passive.

Nous croyons que les actions canadiennes représentent une occasion beaucoup plus intéressante pour les gestionnaires actifs que les actions américaines. Le fait d’utiliser la couverture des analystes comme indication de l’efficacité des cours des actions confirme certainement cette affirmation, comme il est illustré ci-dessous. Prenons l’exemple des bénéficiaires purs et simples de l’IA : NVIDIA cotée en bourse aux États-Unis est couverte par plus de 90 analystes du côté vendeur, contre seulement environ 18 pour Celestica, l’analogue canadien de l’IA. À mesure que la dispersion au sein des secteurs et entre les secteurs augmente dans un contexte de reprise économique inégale, nous nous attendons à ce que la sélection des titres soit un facteur de rendement de plus en plus important, et à ce que la gestion active soit particulièrement bien positionnée au Canada.

Le marché canadien est moins efficace
Moins d’analystes couvrent le marché canadien

Source : Bloomberg. Données au 31 décembre 2025.

Risques pesant sur les perspectives

Le principal risque que nous surveillons est l’incertitude géopolitique accrue, en particulier en ce qui a trait à la renégociation de l’ACEUM. Bien que la rhétorique commerciale aux États-Unis se soit intensifiée et ait créé des poches de volatilité, l’incidence macroéconomique sur le Canada a été limitée jusqu’à maintenant. En particulier, le Canada a créé plus d’emplois par habitant qu’il n’en a perdu depuis le début de la présidence de Trump. Bien que les prochaines négociations de l’ACEUM soient susceptibles de générer un risque de nouvelles menaces tarifaires, la sensibilité politique de l’inflation et les pressions sur le coût de la vie au cours d’une année électorale de milieu de mandat aux États-Unis devraient limiter la portée de résultats nettement défavorables. Nous continuons de suivre de près l’évolution de la situation.

Le Canada éclipse l’ère Trump en matière d’emplois

Sources : Services économiques Banque Scotia, Statistique Canada, Bureau of Labor Statistics.

À propos de Gestion de placements Connor, Clark & Lunn Ltée

Fondée en 1982, Connor, Clark & Lunn est une société fermée de gestion de placements ayant à coeur d’offrir à sa clientèle diversifiée un service exceptionnel et une vaste gamme de solutions de placement intéressantes. Nous savons à quels défis sont confrontés les particuliers, les régimes de retraite, les entreprises, les fondations, les fonds communs de placement, les Premières Nations et d’autres organisations, et nous nous employons à répondre à leurs besoins en matière de placement en proposant une gamme exhaustive de stratégies de placement, qui réunit les catégories d’actif traditionnelles ou non de même qu’une diversité de styles quantitatifs et fondamentaux.

Le matériel sur ce site Web n’est présenté qu’à titre informatif; il ne doit pas être considéré comme une source de conseils en placement ou en finance. Par ailleurs, l’information sur ce site Web ne doit pas être interprétée comme une offre ou une sollicitation de la part d’une société membre du Groupe financier Connor, Clark & Lunn de fournir des services de gestion de placement ou de vendre ou d’acheter des produits.

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While market commentary in late 2025 focused on the question of the sustainability of high valuations of mega-cap US technology stocks, Canadian equities quietly delivered material outperformance, as illustrated below. This phenomenon was not restricted to large cap stocks as the TSX Small Cap Index was up a remarkable 50.2%, outpacing the Russell 2000 at 7.5%, in CAD.

Exceptional Year for Canadian Equities
Source: S&P Global Intelligence

Market Leadership Rotates — Often for Long Periods

History demonstrates that Canadian and U.S. equity markets experience long cycles of relative outperformance and underperformance. US equities have outperformed for 10+ years following the Global Financial Crisis until more recently, while Canadian equities outperformed in the 10+ years following the bursting of the technology bubble in the late 90s:

Market Leadership Rotates Over Extended Periods
Source: Bloomberg

The Case for Continued Canadian Equity Outperformance

While relative performance cycles are difficult to predict, there are several tailwinds that should support Canadian outperformance going forward.

1. Canadian Economy at an Inflection Point

Canada’s productivity decline during the ‘Lost Decade’ from 2015 to 2025 is well documented, as are the challenges facing the domestic economy as a result of changing US nationalism and trade policy. However, we may look back at 2025 as a positive inflection point for the Canadian economy with multiple drivers now in place to enhance future growth prospects:

• Structural exposure to secular growth industries: Canada has outsized exposure to energy and materials critical to rising global power demand. Electrification, AI infrastructure and grid investment are driving sustained demand for copper, natural gas and uranium, while years of underinvestment limit new supply. In addition, de-globalization and protectionist trade policies increase the risk of persistently higher inflation, supporting elevated precious metals prices.
• Fiscal policy turning from drag to tailwind: Recent U.S. trade actions have accelerated a shift in Canada’s fiscal approach. The new federal government under Prime Minister Carney is pursuing a more pro-growth, pro-business agenda focused on investment, targeted spending and tax relief. We estimate these measures could add ~40bps to GDP growth each year over the medium term, marking a clear economic inflection point.
• Monetary policy now firmly supportive: The Bank of Canada has cut rates by nearly 300bps over the past 18 months, moving policy decisively into accommodative territory. Easier financial conditions should support growth, investment and earnings across the Canadian equity market.

2. Attractive Equity Market Dynamics

Improved economic growth does not always translate into equity market outperformance. There are several unique attributes of the S&P TSX Composite Index though, that bode well for future performance:

Compelling Valuations and Attractive Sector Composition

The lower P/E multiple for the TSX relative to the S&P 500 is often attributed to its lower exposure to high-growth, mega-cap technology-related stocks. While the technology-related exposure weight is much larger in the S&P 500, investors may be surprised to learn that virtually all sectors are more attractively valued in the TSX, despite very similar estimates for earnings growth in 2026, as illustrated below:

Expect Strong Earnings Growth in 2026
Source: Bloomberg, as of December 31, 2025

“Our team is as excited about the prospects for Canadian equities as we’ve been in at least a decade. We’re finding large, mid and small-cap opportunities that should continue to benefit from the emergence of multiple secular tailwinds. It’s a good time to be a Canadian investor.” Michael McPhillips, Portfolio Manager, Co-Chief Investment Officer & Research Director, Fundamental Equity

Canadian Valuations More Attractive at Index and Sector Level

Source: Bloomberg, *for Real Estate using fwd P/AFFO, for Technology using fwd EV/Sales, Utilities using fwd EV/EBITDA and Energy using fwd P/CF. Data as of Dec 31, 2025.

Outsized Exposure to Power Generation and Gold Producers

US Leadership in Technology Complements Canada’s Strength in Commodities and Banks
Source: S&P Global Intelligence

The table above illustrates the diversification benefits that Canadian equities provide investors who are allocated to US equities, given the very different and complementary sector exposures. Over the past decade, outsized Technology exposure has been a driver of US equity market outperformance.

However looking forward, we expect that the strong representation of companies linked to power generation and gold production in Canadian equity markets will be a strong contributor to performance:

Canadian Companies as % of MSCI ACWI Sector
Source: S&P Global Intelligence as of December 31, 2025

With global investors seeking to access these types of assets and to diversify their US equity exposure, the return of foreign investors could produce a further tailwind.

3. Currency Stability Matters for CAD-Based Investors

Currency risk is often underappreciated until it becomes material. Over the past 12 months alone, the Canadian dollar has experienced approximately a +10% move versus the U.S. dollar. For investors with Canadian-dollar liabilities — pensions, endowments, insurance pools, or domestic spending needs — this represents a meaningful source of portfolio volatility.

CAD/USD Spot
Source: Bloomberg

The main driver of this currency move has been twofold. First, a diminished view of the USD as a safe haven asset by global investors has led to diversification into gold and other assets. The strong representation of gold and other commodity producers in the Canadian equity market have compounded this strength in the Canadian dollar. With each of these trends expected to persist, currency could remain a headwind for CAD-based investors owning US equities.

4. An Attractive Market for Active Management

As with virtually all liquid markets, Canadian equity investors can choose between active and passive exposure.

We believe that Canadian equities offer a far more compelling opportunity for active managers relative to US equities. Using analyst coverage as an indication of how efficiently stocks are priced, certainly supports that assertion, as illustrated below. Consider an example relating to pure-play beneficiaries of AI: US listed NVIDIA is covered by more than 90 sell-side analysts, versus only ~18 for Celestica, Canada’s AI analogue. As dispersion within and across sectors increases amid an uneven economic recovery, we expect stock selection to be an increasingly important driver of returns, positioning active management in Canada particularly well.

Canadian Market is Less Efficient
Fewer Analysts Cover the Canadian Market
Source: Bloomberg. Data as of Dec 31, 2025.

Risks to Our Outlook

The primary risk we are monitoring is heightened geopolitical uncertainty, particularly around the renegotiation of CUSMA. While U.S. trade rhetoric has intensified and created pockets of volatility, the macro impact on Canada to date has been limited. Notably, Canada has added more jobs on a per-capita basis than it has lost since the start of the Trump presidency. While upcoming CUSMA negotiations are likely to generate headline risk and renewed tariff threats, the political sensitivity of inflation and cost-of-living pressures in a U.S. mid-term election year should constrain the scope for materially adverse outcomes. We continue to monitor developments closely.

Canada Blows Away Trump Era on Jobs
Source: Scotiabank Economics, Statistics Canada, Bureau of Labor Statistics

About Connor, Clark & Lunn Investment Management Ltd.

Founded in 1982, Connor, Clark & Lunn is a privately owned investment management organization dedicated to delivering outstanding client service and a wide range of attractive investment solutions to our diverse client base. We understand the investment challenges faced by individuals, pension plans, corporations, foundations, mutual funds, First Nations and other organizations, and focus our efforts on meeting their investment needs by offering a comprehensive array of investment strategies, spanning traditional and alternative asset classes in a variety of quantitative and fundamental styles.

Material presented in this article should be considered for background information only and should not be construed as investment or financial advice. Further, information on this article should not be construed as an offer or solicitation by the Connor, Clark & Lunn group of companies to provide investment management services or to buy or sell any products.

Certain securities regulations prohibit the publication of specific registration information about the registered entities in the Connor, Clark & Lunn group of companies. For more information, please contact the Connor, Clark & Lunn Compliance Department at compliance@cclgroup.com or 604-685-2020.

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Connor, Clark & Lunn Financial Group (CC&L Financial Group) is pleased to announce that Josh Borys is joining its leadership team as a Managing Director with a focus on private market affiliates, effective April 1, 2026.

Josh has deep experience in private debt, with prior roles at Sagard Credit Partners and CPP Investment Board in this asset class. He holds an HBA from the Richard Ivey School of Business at Western University.

“Josh strengthens our Managing Director group by adding dedicated capacity in private markets – an area that represents a significant portion of our business today and will be a key driver of future growth, both with existing affiliates and new affiliates over time,” said Michael Walsh, President & Managing Director, CC&L Financial Group.

Josh will be based in Toronto.

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